MUMBAI: Credit Suisse cut India's gross domestic product (GDP) growth forecast for the fiscal year ending in March 2013 to 6 per cent from 6.5 per cent, while also cutting its forecast for fiscal 2013/14 to 7.2 per cent from 7.8 per cent.

Credit Suisse said it expected interest rates to be cut by an additional 125 basis points (bps) by the end of the current fiscal year, including a 50 bps cut in October.

"Given the lags with which monetary policy operates, the monetary easing will have a bigger impact on 2014/15 GDP growth than 2013/14," the investment bank wrote in a note dated Thursday.

On Wednesday ratings agency Moody's Investors Service said it expects India's fiscal deficit to exceed 5.1% level this year despite the recent moves by the government to rein in deficit.

Arguing that the subsidy reduction will only help deficit to improve marginally, slowdown in economic growth remains a concern over the next few quarters, said Atsi Sheth, the agency's VP (sovereign risk group). "Conditions like high inflation, high interest rates and slowing consumption, besides the slowdown in the agriculture sector, lead us to expect slow growth over the next few quarters," Sheth said in a conference call organised by Mumbai-based broking firm Nirmal Bang on Wednesday.

"We weren't surprised with Indian growth slowing down. Any country that has private sector-led growth will be subject to business cycles; this has been true throughout history," Sheth said, reiterating the agency's Baa3 or 'stable' outlook for Indian sovereign credit.

The government announced several measures in the last fortnight to contain fiscal deficit. The measures included reducing subsidy bill by increasing diesel prices by Rs 5 per litre and capping the number of LPG cylinders to six per household.